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Boeing to admit criminal fraud in 737 Max case

July 8, 2024

US aircraft giant Boeing has agreed to plead guilty to a criminal fraud conspiracy charge to resolve an investigation linked to two fatal crashes of its 737 MAX planes.

A Boeing 737 Max jet, piloted by Federal Aviation Administration (FAA) chief Steve Dickson, set to land at Boeing Field following a test flight
Prosecutors say say the aerospace giant deceived regulators who approved aircraft and pilot-training requirementsImage: Elaine Thompson/AP Photo/picture alliance

Planemaker Boeing is to plead guilty to a charge of conspiracy to criminal fraud related to its 737 MAX planes, the US Department of Justice (DOJ) said late on Sunday.

The guilty plea, which brands the company a felon and comes with a $243.6 million (€225 million) fine, potentially threatens its ability to win lucrative contracts with the US government.

What is the case about?

Prosecutors say the aerospace giant deceived regulators who approved aircraft and pilot-training requirements.

The company is to admit it knowingly made false representations to the Federal Aviation Administration about a key software feature for the MAX to operate at low speeds.

The flight-control system was implicated in two fatal crashes in Indonesia in October 2018 and in Ethiopia five months later, in which 189 and 157 people died respectively.

The crashes prompted victims' families to demand that Boeing face prosecution. Some families who viewed the plea arrangement last week have criticized it as a "sweetheart deal" and promised to oppose it in court.

Boeing became exposed to criminal prosecution after the DOJ found in May that the company had broken a 2021 agreement involving the fatal crashes.

Boeing: Turbulent times for US planemaker

The agreed penalty is Boeing's second fine of $243.6 connected to the deadly crashes. The company paid the fine previously as part of a $2.5 billion settlement in 2021.

Why is Boeing pleading guilty?

The plea means that Boeing avoids a difficult trial that would place greater public scrutiny on corporate decisions in the runup to the plane crashes. 

It could also smooth the way for the firm as it seeks the green light for its planned acquisition of Spirit AeroSystems.

However, the agreement does not give Boeing immunity for other incidents. The company is also being investigated over a panel that blew off a Max jetliner during an Alaska Airlines flight
in January.

As part of the deal, Boeing has also agreed to invest at least $455 million across the next three years to strengthen safety and compliance programs. 

rc/lo (AP, Reuters)